ANALYSIS: Homeowners have been hit by a flurry of house price stats in recent days, including from OneRoof. On the surface, pretty much of all of the data seems to point to continued weaknesses in the market. The latest figures, released today, are from Barfoot & Thompson, Auckland’s largest residential real estate agency.
The headline stats from the agency’s April sales are:
- It's Barfoot & Thompson's worst April for sales in 22 years, even worse than April 2020, when the country was in lockdown;
- Sales dropped 38% month-on-month, and 23% year-on-year;
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- New listings were down 25% month-on-month and 16% year-on-year; and
- The average price for the agency’s April sales was $1.08 million, while the median price dipped below $1m for the first time since January 2021.
From the above, it looks as the housing market in Auckland has, in the words of Barfoot & Thompson managing director Peter Thompson, “retreated into hibernation in April”.
March figures for Barfoot & Thompson, and other agencies in Auckland, were a burst of sunshine after the collapse in February and January, much of it driven by the poor weather that battered the city.
Some of the slowdown in April's figures can be attributed to school holidays and bad weather, but interest rate rises and general uncertainty about the future health of the economy are also making buyers and sellers think twice.
Sales volumes and average sale prices typically drop between March and April but this year the rate of decline was slightly higher than the long-term average, although not as bad as the year before.
Fundamentally, a lot of Kiwis don't feel good about the housing market right now. But all of that is likely to change. OneRoof data published at the start of the month showed the speed at which house prices were dropping had slowed in recent months.
According to the latest figures from the OneRoof-Valocity House Value Index (taken at the end of April 2023), the rate of decline in Auckland's average property value eased in the last six months, from a rolling quarterly average of 5% to just over 3%.
And for nervous sellers and buyers, it's worth noting that Auckland's current average property value is still 16.7% ($187,000) higher than it was pre-Covid and 20.3% ($221,000) above what it was five years ago.
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Thompson says: “Vendors are accepting that to make a sale they need to adjust their price expectations, but they are not prepared to take any price just to achieve a sale."
That may budge in coming months, and the expected loosening of the loan to value ratio rules in June may boost buyer confidence, while fewer new listings may create more competition for properties.
First-home buyers still remain the biggest buying group in Auckland. Their share of new mortgage registrations in the first quarter of 2023 was 47.7%, up from 41% in the first quarter of 2022. The share of new mortgage registrations by first-home buyers in Canterbury and Wellington in Q1 2023 was 43.3% and 47% respectively.
New mortgage registrations by investors in Auckland the first quarter of 2023 was 24.3%, up from 21.9% in the first quarter of 2022. Investors' share of purchases in Canterbury and Wellington in Q1 this year was 22.5% and 17.9% respectively.
- Owen Vaughan is editor of OneRoof
